Economist Death Spiral Watch
Methinks Greg Ip has made a big mistake, and should return to the WSJ news pages pronto. The Economist's Free Exchange weblog has decided that it is entitled not just to its own opinions, but to its own facts.
It writes:
Free exchange: I HAVE noticed a trend to paint every economic policy of Jon McCain, and conservative economics generally, as hopelessly misguided.... Granted, Mr McCain continues to support the ludicrous gas tax holiday. But, if we deemed every politician's entire economic policy as bunk because of a handful of bad ideas, we would rule out every candidate. Also, Mr McCain may never live down admitting he does not know much about economics, but how many politicians do?...
There seems to be a temptation lately to label anyone who even dares mention supply-side economics, without immediately deeming it the silliest idea born to a napkin, an economic heretic. That's unfortunate. True, with the exception of very high marginal tax rates, a tax cut will generally not pay for itself...
Perhaps we should stop reading there. In spite of attempts by others (Bruce Bartlett, Marty Feldstein) to reclaim the term, ever since David Stockman's winter 1981 budget testimony "supply-side tax cut" has meant a tax cut that will move us toward budget balance without requiring any offsetting reductions in spending. But let us read on:
But there exists ample empirical evidence that cutting income taxes does increase growth.... Writing off supply-side economics as a blatant fallacy is as much of a 1990s relic as wearing a goatee...
And we should probably stop there. There is empirical evidence that cutting income taxes and cutting spending at the same time increases medium-run growth. There is no evidence that cutting income taxes and leaving spending the same increases medium run growth. But let us rad on:
Each candidate has some of good and bad economic policies. Mr McCain does champion free trade and fiscal responsibility...
And let's pull the plug there, and stop reading. Whatever John McCain's economic policies are, he is not a "champion of fiscal responsibility"--perhaps he used to be, but he has flipped. John McCain's proposals take a budget that is projected to be in rough balance in 2013 according to the CBO baseline and transform it into a $700B deficit. Those plans are not those of a "champion of fiscal responsibility"--and the only people who would say they are are ones who are deliberately auditioning to be the star in a Clown Show.
There are two theories for why the Economist--since it lacks bylines, we have to speak of it as a single entity--wants to star in a Clown Show these days:
- They are simply bonkers...
- They think that if they do not pretend to be bonkers, then rich Americans won't subscribe in sufficient numbers and they will have to shut down.
I used to think (2), but this makes me think (1). What extra subscriptions can you gain by saying that John McCain is a "champion of fiscal responsibility"?
Why oh why can't we have a better press corps?
